BILL NUMBER: SB 267 CHAPTERED 10/10/99 CHAPTER 736 FILED WITH SECRETARY OF STATE OCTOBER 10, 1999 APPROVED BY GOVERNOR OCTOBER 7, 1999 PASSED THE SENATE SEPTEMBER 9, 1999 PASSED THE ASSEMBLY SEPTEMBER 8, 1999 AMENDED IN ASSEMBLY SEPTEMBER 7, 1999 AMENDED IN ASSEMBLY SEPTEMBER 3, 1999 AMENDED IN ASSEMBLY JULY 8, 1999 AMENDED IN ASSEMBLY JUNE 24, 1999 AMENDED IN ASSEMBLY JUNE 22, 1999 AMENDED IN SENATE MAY 19, 1999 AMENDED IN SENATE APRIL 14, 1999 AMENDED IN SENATE APRIL 5, 1999 INTRODUCED BY Senator Lewis FEBRUARY 1, 1999 An act to amend Sections 41365 and 47661 of the Education Code, relating to charter schools, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST SB 267, Lewis. Charter schools: funding. Existing law establishes the Charter School Revolving Loan Fund in the State Treasury, as a continuously appropriated fund, to loan money to school districts for charter schools and requires the Superintendent of Public Instruction to deposit $114,000 from the federal Public Charter School Program grant funds awarded to the State Department of Education for 1996-97 and, appropriated in the Budget Act of 1996, into the Charter School Revolving Loan Fund. Existing law authorizes additional federal Public Charter School Program grant funds appropriated in the Budget Act of 1996 to be transferred by the Superintendent of Public Instruction to the Charter School Revolving Loan Fund. Existing law authorizes loans from money in the Charter School Revolving Loan Fund for use by charter schools in the first year in which it enrolls pupils in an amount not to exceed $50,000. This bill would delete the continuous appropriation, would delete the references to specific items of appropriation, as they pertain to federal Public Charter School Program grant funds, and would require funds appropriated to the fund to remain available for the purposes of the fund until reappropriated or reverted by the Legislature through the Budget Act or any other act. The bill would authorize loans to be made from the Charter School Revolving Loan Fund directly to certain charter schools, as well as to the chartering authority for charter schools, and would provide that a loan to a chartering authority, or to a charter school, shall not exceed $250,000. Under existing law, a chartering authority may be a school district, a county board of education, or the State Board of Education. Existing law requires the Controller to make loan repayment deductions from apportionments during each of the 2 successive fiscal years. This bill would, instead, require repayment of the full amount loaned to the chartering authority or charter school to be deducted by the Controller in equal annual amounts over a number of years agreed upon between the loan recipient and the State Department of Education, not to exceed 5 years for any loan and would make conforming changes. This bill would, notwithstanding other provisions of law, authorize a loan to be made directly to a charter school only in the case of a charter school that is incorporated, and would require the chartering authority to, also, be liable for repayment of the loan in the case of default by the charter school. Existing law, with certain exceptions, requires an agency sponsoring a charter school to exclude the attendance of pupils in the charter school for the purposes of computing eligibility for funding of categorical and other programs of the sponsoring agency. This bill would, instead, require that a sponsoring school district's average daily attendance be calculated pursuant to a formula, which would provide an adjustment for pupils attending charter schools. This bill would declare that it is to take effect immediately as an urgency statute. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 41365 of the Education Code is amended to read: 41365. (a) The Charter School Revolving Loan Fund is hereby created in the State Treasury. The Charter School Revolving Loan Fund shall be comprised of federal funds obtained by the state for charter schools and any other funds appropriated or transferred to the fund through the annual budget process. Funds appropriated to the Charter School Revolving Loan Fund shall remain available for the purposes of the fund until reappropriated or reverted by the Legislature through the annual Budget Act or any other act. (b) Loans may be made from moneys in the Charter School Revolving Loan Fund to a chartering authority for charter schools that are not a conversion of an existing school, or directly to a charter school that qualifies to receive funding pursuant to Chapter 6 (commencing with Section 47630) that is not a conversion of an existing school, upon application of a chartering authority or charter school and approval by the Superintendent of Public Instruction. A loan is for use by the charter school during the period from the date the charter is granted pursuant to Section 47605 to the end of the fiscal year in which the charter school first enrolls pupils. Money loaned to a chartering authority for a charter school, or to a charter school, pursuant to this section shall be used only to meet the purposes of the charter granted pursuant to Section 47605. The loan to a chartering authority for a charter school, or to a charter school, pursuant to this subdivision shall not exceed two hundred fifty thousand dollars ($250,000). This subdivision does not apply to a charter school that obtains renewal of a charter pursuant to Section 47607. (c) Commencing with the first fiscal year following the fiscal year the charter school first enrolls pupils, the Controller shall deduct from apportionments made to the chartering authority or charter school, as appropriate, an amount equal to the annual repayment of the amount loaned to the chartering authority or charter school for the charter school under this section and pay the same amount into the Charter School Revolving Loan Fund in the State Treasury. Repayment of the full amount loaned to the chartering authority shall be deducted by the Controller in equal annual amounts over a number of years agreed upon between the loan recipient and the State Department of Education, not to exceed five years for any loan. (d) (1) Notwithstanding other provisions of law, a loan may be made directly to a charter school pursuant to this section only in the case of a charter school that is incorporated. (2) Notwithstanding other provisions of law, in the case of default of a loan made directly to a charter school pursuant to this section, the chartering authority shall, also, be liable for repayment of the loan. SEC. 2. Section 47661 of the Education Code, as amended by Chapter 78 of the Statutes of 1999, is amended to read: 47661. For purposes of paragraph (1) of subdivision (a) of Section 42238.5, a sponsoring school district's average daily attendance shall be computed as follows: (a) Compute the sponsoring school district's regular average daily attendance in the current year, excluding all attendance of pupils in charter schools. (b) Compute the sponsoring school district's second principal apportionment regular average daily attendance for the prior year, excluding all attendance of pupils who either attended a charter school in the prior year or who satisfy both of the following conditions: (1) He or she attended one or more noncharter schools of the school district between July 1 and the last day of the second period, inclusive, in the prior year. (2) He or she attended a charter school sponsored by the school district between July 1 and the last day of the second period, inclusive, in the current year. (c) To the greater of the amounts computed pursuant to subdivisions (a) and (b), add the regular average daily attendance in the current year of all pupils attending charter schools sponsored by the district that are not funded pursuant to this chapter. SEC. 3. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order that necessary educational opportunities can be made available for the entire 1999-2000 public school year, it is necessary that this act take effect immediately.